Advantages And Disadvantages Of Monopolistic Competition Market

Nespresso's story begins with a simple but revolutionary idea; "The perfect cup of coffee, time after time and cups after cups". To do this Nespresso pioneered the concept of portioned premium coffee, it is designed to provide maximum convenience. This process has redefined the way coffee lovers from all over the world can enjoy their coffee. The key idea is in terms of quality, innovation and perfect.

Many companies and people have committed monopolies before they were illegal and even after it. A monopoly is when one person has complete control over a company and makes close to 100% of the profits but because of the The Sherman Antitrust Act passed on April 8, 1890, “combination in the form of trust and otherwise, conspiracy in restraint of trade.” In simple terms the act prohibited any forms of monopoly in business and marketing fields. Monopolies committed before the Act, making it legal in every way but unethical, by some of the famously known marketers like John D. Rockefeller making him filthy rich. While others committed after The Sherman Antitrust Act caused a company like Microsoft to be sued and have a bruised ego.

The specialty coffee market is intensely competitive, including with respect to product quality, innovation, service, convenience, and price, and we face significant and increasing competition in all these areas in each of our channels and markets.

Competition in the Canadian coffee market was intense. More and more new competitors entered into the market, such as some specialty retailers. As the leader of the market, Kraft should consider to adjust its current strategy. The company should not only dominated traditional ground and whole bean coffee segment, but also invested in other niche market, like coffee pods segment.

Nestlé’s products are categorized as business and convenience products. They different variation of products and they have a 12 product lines. Besides, they have products which are in the introduction stage, growth stage and maturity stage. Nestlé (Malaysia) Berhad are their trade name while Nestlé is their brand name. They are using mixed branding. They also provide different kind of packaging for different type of product. They are using demand-oriented, cost-oriented, profit-oriented, competition-oriented, and special adjustment approaches. Their headquarters is in Switzerland and they has 114 outlets across the world. They 7 factories in Malaysia. They are using multichannel marketing. Furthermore, they promote their products through advertising, personal selling, public relations, sales promotion and social

Third alternative is to stand by, because the risk of non profitability is too high and because the perceived price and quality value does not give the product the best positioning. Nestlé should wait until doing deep test market to be sure about parent brand penetration rate and resolve price/value and positioning problem by trying to reduce product price. If this option is chosen, Nestlé will lose the first mover advantage, pre-empted by competitors and probably will never get the deserved market share.

* Foreign companies, such as Nestle, have a strong competitive advantage. Nestle has a long-term investment strategy, use local production and supplier to reduce cost, train and develop local staff who has a better understanding of the local market , and develop its own storage facilities, distribution and marketing network.. In addition, Nestle develop product that fit Russian taste and traditions.

The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or await results from the United States. Key strategic decisions include which target market to focus on and what value proposition to signal. Important questions are also raised as to how the new product should be branded, which flavors to offer, whether Kraft should use traditional distribution channels or direct-to-store delivery, and what forms of advertising and promotion to use. The case provides a basis for discussing consumer decision making, and stresses the importance of providing a clear incremental benefit when introducing a new product in an established category.

Nestle Product includes features that contains combinations of health and hygiene and remembering the requirements in different taste. Nestle is to be tailored to individual needs by consumers and promotion will be used to attract all the consumers.

169). Using the change cube in the Mintzberg text, Nestlé will be focusing on strategy by improving or creating additional products. As Nestlé is already committed to being

The major concern of Competition Act is to deal with anti-competitive agreements, abuse of dominant position, combination and regulation of combination. Few of these are discussed below with their specific provisions:-

Unlike competitive markets consisted of a large number of producers which compete with one another to satisfy consumer’s needs and have no influence on price, monopolistic markets are made up of only one producer who is able to control prices in the market. Stager (1992) notes it is the case of a pure monopoly which appears when a commodity is produced by only one producer and it does not have any close substitutes (cited in Manesh and Karimani, 2017). Evidently, in the absence of alternative products, the producer does not compete with others. He furthermore states this tendency happens rarely in real world since majority of commodities could be replaced by other raw materials. It is, therefore, considered the definition of monopoly relies

In this modern era, big firms are facing stiff competition as they come up with more and more products with their own special trademarks to distinguish themselves. Such competition is called monopolistic competition where all firms produce similar yet not perfectly substitutable products. There is no restriction as any firms are able to enter the industry as long as the profit generated is enough the cover the initial cost and earnings. Each firms have their own flair and attraction to stand its own ground it the market. Monopolistic competition differs from perfect competition as production cost is not as issue. Because of this, firms are usually left with excess production. (Investopedia, n.d.)

Stratification Monopoly exemplified social stratification and social class inequality. Social stratification is “how individuals and groups are layered and ranked in society according to their access to and possession of valued resources” (Ballantine et. al 179). During this game each player was assigned to a separate socio-economic class whether that be Upper Class, Middle Class, Working Class, or Lower Class. These different stratifications led to some significant advantages and disadvantages for each social group. The Upper Class began with $2,000, Middle Class with $1,500, Working Class with $1,000, and Lower Class with $500. In addition to the differing levels of income that we began with, each socio-economic class also received a different amount of money after passing “GO”: Upper Class received $400, Middle Class received $250, Working Class received $150, and Lower Class received $100. As the game progressed it was easy to tell which people were in which class. The Upper Class dominated the game, they were capable of buying any property they wanted and could quickly build upon those properties as well. The Middle Class and Working Class had a similar game to each other but the Middle Class had a little more monetary leeway when it came to buying properties. Lastly, the Lower Class had a very difficult time competing in this game. When they finally had enough money to buy a property, they would end up landing on one that was owned by someone else, therefore taking away any money that they had saved in order to buy a property for themselves. In the end of my group’s game, the Upper Class won, Working Class got second, Middle Class got third, and Lower Class got fourth. As stated, the Working Class ended up beating the Middle Class which showed that upward mobility was possible in this scenario; however, the Working Class had to take several risks in order to move up the ladder, such as investing into properties when they had little money to sacrifice. This was in contrast to the Middle Class playing it safe and not investing into every property that they landed on. Throughout the game, the rich got richer and the poor continued to get poorer which is exactly what is happening in the real world today.

In terms of competition and the forces, which could limit the success of Starbucks it is important they stay ahead or even with other companies concerning innovative products. Many more micro companies are coming up with new products with a similar quality and a lower price/cost. It is important that Starbucks continues to search for innovative products to continually satisfy their customers. At the same time “rivalry” amongst Starbucks and smaller providers of coffee will continue to increase as the demand for coffee continues. The buyers bargaining power is significant as they can determine the cost, type of product, quantity and ultimately